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  • Writer's picturePeter Searle

Recovering your costs if a contract over runs and you are not responsible

The Contract contractors enter into at the beginning of a project should set out what happens in the event of the situations which are likely to occur. Whilst it all might seem very friendly to say, “we’ll put the contract in the draw”, this is not the best policy. It is there for a reason and should have taken time and effort to agree. If it has not, then there is likely to be some nasty surprises along the way.

Contracts which are issued are rarely evenly balanced, so it is worth getting them sorted out before you start. It sets the tone of a professional relationship and clarifies how things will be managed. Two of the fundamental elements of a construction contract are the start and finish date. Surprisingly, these two dates cause untold issues. Particularly, the latter, the finish date, as there is often a financial cost incurred for finishing late, known as Liquidated and Ascertained Damages (LAD’s).

Inevitably, due to the complexity of construction projects, changes will be made along the way and there will be other disrupting factors. If you are not responsible for these variations, or disrupting factors, then you need to protect yourself from incurring the LAD’s. Not only should you protect yourself from the LAD’s you should claim the additional supervisory costs, overheads, and profit for being on site longer than originally contracted.

Standard construction contracts break the issue down into two parts. Firstly, the actual time added to a contract, to extend the completion date to a revised date and secondly the costs which are associated with it. The extensions can be for different reasons, some come with costs some without. But if you are not responsible for the contract requiring more time, then you should be entitled to the additional costs.

The Society of Construction Lawyers Delay and Disruption Protocol sets out methods for calculating the additional time which can be claimed and determining who is responsible. The methods require evidence of “cause and effect”, of the sequence of activities to be demonstrated. Whilst the calculation using a logic linked program, is usually carried out by specialist planners, the collection of the data is done by the site staff. PvA Tracker is an App which can be used by the site staff to record, Planned activities versus Actual activities (PvA) on a regular basis and present that data to who ever you choose to manage your extension of time claim which will be issued to recover your costs and protect you from LAD’s.

For a demonstration of the app, or to find out more, please look at the website

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